Disclosing Private Health Information, Quirky Question # 33
Quirky Question # 33:
I am the VP of HR for a hospital. Each of our employees receives a formal policy, prohibiting them from divulging any “patient care data” to anyone. Our policy is compliant with federal law.
A nurse in our ER recently became aware that a mother and her two children were being evaluated for meningitis, and that they had been instructed not to allow the children to return to school until it was determined whether the children were infected or contagious. The mother, however, refused to have her children tested and they left the hospital against medical advice.
The very next day, our nurse dropped her own son off at school and saw the two children who had been in the emergency room the day before. She decided to leave with her son. When a teacher asked her why she left, she explained that the two other children were at the hospital the day before with their mother and were not supposed to return to school until they were tested for meningitis. The school then contacted the mother and asked her to remove her children from the school.
The mother of these two children has now contacted the hospital, outraged that this information about their medical situation has been shared with others. Given our clear policy that requires “patient care data” to be kept confidential, should we fire our nurse for divulging this information?
Roy’s Analysis:
Like many of questions I have posted, this question highlights the conflict between two important, but competing, public policies. One policy is the critical need for maintaining the privacy of patient information. The other policy is the crucial importance of maintaining public health. In this question, those policies collide.
This fact pattern was drawn, not from a client question, but from the recent case of Serrano v. Christ Hospital, No. A-448-06T3 (New Jersey Sup. Ct. App. Div.; Dec. 21, 2007). In Serrano, the hospital concluded that the patient’s privacy rights were paramount and discharged the employee who had shared the patient’s confidential information with the school, notwithstanding her 16-year employment history. In the case (unlike the question we devised), the employee who revealed this information was a secretary in the hospital’s intensive care unit. Because she was bilingual (English and Spanish), she had been asked to translate for an elderly Spanish-speaking woman who was being tested for meningitis. While assisting with the translation, she learned that the elderly patient had a daughter and that the daughter’s son attended the same nursery as her own daughter. The patient’s daughter and grandchildren were advised that they should be tested for exposure to meningitis but they declined to participate in the testing.
The next day, when the secretary took her own daughter to the nursery school, she saw the patient’s grandchild at the nursery, coughing. As set forth in our hypothetical problem, she left with her son and when later questioned by the school regarding why she had done so, she explained the situation, including revealing the patient’s condition. The nursery school then contacted the potentially contagious family and insisted that they take their son to a physician for an examination.
Following the family’s complaint to the hospital regarding the disclosure of their medical information, the hospital fired Serrano, the secretary who had disclosed the information. The secretary then sued, contending that her discharge constituted a violation of the public policy designed to protect public health. Despite these policies, the District Court dismissed the discharged employee’s claim on summary judgment. The appellate court, however, reversed.
Oddly, in my view, the appellate court sent the case back to the lower court to resolve the conflict between the two competing public policies, noting that these questions are “best left for the factfinder to decide.” This part of the court’s analysis perplexes me somewhat. The key facts are essentially undisputed. The secretary admitted that she had disclosed the patient information to the school and the school acknowledged that it had removed the student pending an examination by a physician and medical clearance. The hospital acknowledged that it fired the secretary because of her disclosure of the patient’s data. I’m not sure what additional “facts” the “factfinder” needs to resolve. Essentially, the courts of New Jersey need to resolve the legal question regarding which of the two important state public policies is paramount. Further, the courts need to resolve the issue of whether, even assuming that the public health policy is more important than the patient’s privacy rights, the nature of the disclosure here was appropriate.
When discussing this question with some insightful friends this past weekend, a few consensus themes emerged. First, a hospital cannot allow each individual employee to become the interpreter of hospital policy. If every employee is empowered to assess hospital policies (here, the federally mandated patient privacy policy) and act on his/her own interpretation, the hospital no longer has a policy. Second, the method of disclosure here was inappropriate. The secretary did not contact the hospital administration or the hospital’s General Counsel. The secretary did not call the New Jersey Department of Health to report the situation. Rather, she simply acted independently and reported the information to the school. Although it is easy to understand how these events could have unfolded given the facts that her own child attended the nursery and that the school called her and requested her to explain why she did not drop off her child, that does not excuse her actions. As the observations above suggest, there were alternative responses she could have provided the school, pending a more thoughtful examination of these issues. Third, one could legitimately question whether Serrano truly was trying to advance an important public policy. She did not march into the hospital administration when the family left the hospital against medical advice. She did not make the case for reporting the situation to governmental authorities, despite the fact that she knew the patient’s grandchild was in nursery school. She did not contact the New Jersey Health Department to report the situation herself. Indeed, she only acted in the “public interest” when her family was potentially directly affected. This type of conduct is not necessarily consistent with advancing an important public policy.
Nevertheless, if I were reading tea leaves, I’d predict the jury will side with the discharged secretary. Any parent will be able to empathize with her predicament and her concern for her own child’s safety. The jury will be balancing the risks of exposing a group of children to a potentially fatal disease with the privacy interests of a single person who imprudently rejected standard medical treatment. The jury also may wonder why the hospital did not step up to protect the public health when the family refused appropriate medical treatment. Finally, the jurors may be uneasy about the seemingly harsh sanction (termination) imposed on a 16-year employee who was inadvertently thrust into a very difficult situation.
Barring settlement, there is more to come on this case, so stay tuned. I’ll try to follow up when the case progresses further through the legal system.
Sexual Harassment — Activities Outside the Workplace, Quirky Question # 32
I am an attorney in the Law Department of an advertising agency. I recently learned in a roundabout way that one of our female employees is a motorcycle enthusiast. For the last few years, she has taken time off from work to attend the motorcycle rally in Sturgis, South Dakota. This year, someone at work was surfing the Web and looked at various Sturgis websites. (I’ve since learned that there are more than 1000 Sturgis websites, many of which contain photos.) Our employee was pictured in photos on a number of the Sturgis websites and in many of them she is not wearing much (if any) clothing. Some of the photos are quite suggestive.
One of our employees downloaded several of the photos and circulated them via email to other employees in our office. One employee is using one of the pics as the “wallpaper” on his computer. A number of our employees have been asking our Sturgis enthusiast about her experience and what “really goes on at Sturgis,” Not all of the questions are in good taste. Other employees (mostly, but not exclusively, male) have been teasing our employee quite a bit (sometimes crudely) about her Sturgis trip. She recently reported to me that she finds their comments both offensive and irritating. My initial reaction was “What did you expect?”, but I did not express that sentiment to her. I’ve informally asked some of the guys to tone it down, but I’m not sure I’m getting through to them. What recommendations would you make regarding how this should be handled?
Exacerbating the situation from a potential liability standpoint is that your employee already has complained to you. Given your position as an attorney in Law Department, your knowledge will be imputed to the corporation. Moreover, you have described the fact that you have attempted to take action to address some of the concerns expressed by the offended employee (“I’ve informally asked some of the guys to tone it down . . ..”), but that you are not getting the hoped-for response.
In sum, you have a harassment complaint, the company is on notice, and the problem has not been rectified. In my view, you need to respond more aggressively to the problems that have been brought to your attention. This includes the four distinct issues of which you have been made aware: a) teasing; b) crude comments; c) circulation of pornographic materials via your company’s computer system; and d) display of a photo of a (partially ?) naked woman on a computer screen. If an investigation is necessary (you already may have all the facts you need), you should conduct one promptly. To the extent that you confirm the allegations that have been brought to your attention, you should discipline the employees who have engaged in the problematic conduct. I recommend that you ignore the fact that some of the offending conduct arguably was precipitated, in part, by the non-work-related behaviors of the complaining employee.
In sexual harassment cases, you must distinguish between the work-related behaviors of your employees and the non-work-related behaviors. The non-work-related behaviors are largely irrelevant to the sexual harassment analysis. The fact that one of your employees is a motorcycle enthusiast, who enjoys the Sturgis rally, and who engages in behavior while in Sturgis that is radically different from her workplace conduct, does not mean that she is fair game for inappropriate, harassing workplace conduct.
The most directly analogous case of which I am aware is a decision out of the Eighth Circuit Court of Appeals, Burns v. McGregor Electronic Industries, Inc., 995 F.2d 559 (1992). The plaintiff, Lisa Burns, was a victim of substantial (often outrageous) sexual harassment by a number of employees, including the company’s owner/President who was more than 40 years her senior. Compounding the problem of her treatment in the workplace, she had posed nude for a couple of motorcycle magazines. This resulted in significant additional abusive conduct directed toward her. Despite these facts, the District Court granted the employer summary judgment. In an opinion deferential to the District Court, the Eighth Circuit reversed and remanded, but noted, “Our disposition of this case should not be read as constituting a de facto entry of judgment for Burns.”
That was the first Burns opinion. The following year, after the District Court again dismissed Burns’ lawsuit, the case was back in the appellate court (989 F.2d 959 (1993)). The second time around, the appellate court was not quite so deferential. The Eighth Circuit was understandably troubled by the fact that the District Court was unable to distinguish between Burns’ conduct outside of work and her treatment at the workplace. The trial judge seemingly could not get over the fact that Burns had posed nude for a magazine, concluding that, given her behavior, she could not have been offended by her treatment in the workplace. The appellate court stated:
“The plaintiff’s choice to pose for a nude magazine outside work hours is not material to the issue of whether plaintiff found her employer’s work-related conduct offensive. This is not a case where Burns posed in a provocative and suggestive way at work. Her private life, regardless of how reprehensible the trier of fact might find it to be, did not provide lawful acquiescence to unwanted sexual advances at her work place by her employer.”
In the second opinion, the Eighth Circuit gave up on the trial judge, and reversed and remanded with a directive that judgment be entered for the plaintiff, Lisa Burns.
As the Burns decision illustrates, for the most part, an employee’s activities outside the workplace are irrelevant to the issue of whether he/she is a sexual harassment victim in the workplace. The one part of the analysis where this conduct may be considered is when evaluating whether the employee found the behaviors “subjectively offensive.” As was addressed by the U.S. Supreme Court in a post-Burns decision, in a typical harassment case, an employee must establish that the behaviors were both “subjectively” AND “objectively” offensive. For example, with regard to the subjective standard, an employee who initiated a lot of sexual banter in the workplace may have difficulty establishing that she was personally offended by sexual banter. With respect to the objective standard, an employee needs to demonstrate that she is not having a hypersensitive, idiosyncratic reaction, but rather that the behavior would have offended a “reasonable” person.
In the fact pattern presented by your question, you can argue that a person who allowed herself to be photographed nude, in provocative positions, at the Sturgis rally, with the knowledge that her pictures were likely to be displayed on the world wide Web, is not likely to have been “subjectively” offended by the conduct of her co-workers. Absent a direct linkage, however, to her conduct in the workplace, that argument is likely to be unpersuasive. The fact that your employee elected to behave in one way at a motorcycle rally in another state hardly suggests that she was inviting offensive conduct in the workplace, where she has had a very different persona. Given that fact, I suggest that you take her complaints of offensive conduct seriously, take steps to ensure the offensive conduct stops, and discipline the employees who engaged in the conduct described in your question.
Use of Email for Union Organizing, Quirky Question # 31
Quirky Question # 31:
Our company provides desktop computer terminals with email to virtually all of our employees. We have adopted a policy covering the use of all of our Company-provided communications systems, including telephones, computers and email, fax machines and photocopy machines. Our policy provides, “Communication systems are not to be used to solicit or proselytize for commercial ventures, religious or political causes, outside organizations, or other non-job related solicitations.”
In the course of performing a routine download and purge of a computer assigned to a recently departed employee, we became aware of an extensive series of email communications between the departed employee and two current employees concerning efforts to organize to secure union representation. The emails include not only correspondence among these three employees but also messages sent by one or more of them to a large number of employees. We would like to discipline the two remaining employees for violating our Communications Policy. Is there any reason we should not do so?
[When I receive questions about union organizing, the NLRA, collective bargaining agreements and related topics, I promptly walk down the hall to the offices of two of my partners, Bob Hobbins and Doug Christensen. Both Bob and Doug have deep expertise and extensive experience regarding these issues and are positioned far better than I to address these topics. Both also have an uncommon amount of common sense, which you will quickly discover if you have a chance to work with them. Doug kindly agreed to my request to provide an analysis of this question. By way of background, Doug is a 1984 graduate of Notre Dame and a 1988 graduate of Duke University School of Law. Doug's resume is available at www.dorsey.com; his email is christensen.doug@dorsey.com. Doug's analysis is set forth below.]
Doug’s Analysis:
It is likely that you will be able to discipline the two employees for violating your Communications Policy without violating the National Labor Relations Act (NLRA), so long as you have consistently enforced the Policy (and continue to do so) in a non-discriminatory manner. The NLRB recently decided a long-awaited and highly anticipated case that provides important guidance (and significantly greater flexibility) to employers regarding the establishment, implementation, and enforcement of e-mail use policies. To better understand that decision and place it in proper context, a brief discussion of some basic rules about union-related communications in the workplace will be helpful.
The NLRA provides employees of covered employers certain rights, including the Section 7 right “to self-organization to form, join or assist labor organizations . . . and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . ..” Section 8 of the NLRA provides that it is an unfair labor practice for an employer to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed. . . .” It is also an unfair labor practice for an employer “by discrimination . . . to encourage or discourage membership in any labor organization . . ..”
Over the years, the National Labor Relations Board, the federal agency charged with administering the NLRA, has developed an intricate set of rules about union-related communications in the workplace, attempting to balance the statutory rights of employees under the NLRA with employers’ rights to maintain control of their premises and to operate their businesses. An employer generally may not bar union-related communications among employees on employer property, such as a break room or lunchroom, during employees’ non-working time, and it generally may prohibit union-related conversations during working time only if it also prohibits other non-business conversations during working time. Next, the rule had been that an employer generally may prohibit union-related communications by employees using company property, such as bulletin boards, telephones, and copying machines, if it does not discriminate by permitting other non-business use of company property. Additionally, an employer generally may ban non-employee union organizers from its premises, but may not bar access by union agents if it allows other outside solicitors on its premises (except for limited charitable solicitations).
Until late last year, the NLRB had not addressed the rules for regulating electronic workplace conduct in compliance with the NLRA. On December 16, 2007, the NLRB issued its decision in the case of The Guard Publishing Company, 351 NLRB No. 27. In that 3-2 decision, decided along party lines, the NLRB addressed for the first time the question of how employees’ use of their employers’ e-mail systems relates to employee rights under the NLRA. The NLRB reviewed the employer’s communication policy, which prohibited the use of e-mail for “non-job-related solicitations” to determine whether the policy violated employees’ Section 7 rights and was an unfair labor practice.
The relevant portion of the policy at issue in Guard Publishing stated: “Company communications systems and the equipment used to operate the communications systems are owned and provided by the company to assist in conducting the business of The Register-Guard. Communications systems are not to be used to solicit or proselytize for commercial ventures, religious or political causes, outside organizations, or other non-job-related solicitations.”
The evidence before the NLRB showed that employees had – with the employer’s knowledge – used company e-mail for personal announcements, offers of personal items for sale, and other non-business purposes, without any disciplinary actions being taken against the employees who had used e-mail for those purposes. There was no evidence before the NLRB, however, that employees had ever used company e-mail for solicitations on behalf of any outside organization or cause of any kind (other than the United Way, for which the employer conducted a periodic annual compaign).
The employer, a newspaper publisher, twice disciplined a union employee for violating the communication policy after she sent e-mails regarding, among other things, a union rally and upcoming collective bargaining negotiations. The employee and her union challenged the disciplinary actions, and the e-mail policy itself, as violating employees’ rights to engage in collective activity with respect to their working conditions, under Section 7 of the NLRA. They argued that, because e-mail has become the most common method for employees to communicate about work and non-work issues, employers do not have an unfettered right to ban personal e-mail just because the employer owns the e-mail system. They also argued that, because e-mail is similar to face-to-face solicitations that occur in a break room or lunchroom, such communications cannot be banned during non-work time. Conversely, the employer argued that the union had many ways to communicate with the employees it represented other than through the use of the employer’s e-mail system, and that Section 7 does not provide employees with a statutory right to use employer-provided e-mail systems for any purpose. The key issue before the NLRB, then, was whether e-mail should be treated like employee communications on non-working time (which generally cannot be prohibited) or whether it should be treated the same as other situations involving company property, such as bulletin boards, telephones, and copying machines (where employers generally may ban union-related use if they do not discriminate).
The NLRB rejected the argument that employee use of employer-provided e-mail systems are like face-to-face solicitations in a break room or lunchroom which cannot be restricted during non-work time. Instead, the NLRB found an employer’s e-mail system to be like other company property, such as bulletin boards, telephones, and copiers, to which employers have always been permitted to restrict employee access. The NLRB held that no special rule is needed for e-mail, and that an employer may restrict non-business use of its e-mail system in that same way it can restrict the use of its other property.
The NLRB next considered the employee’s and the union’s claim that, having permitted employees’ use of the e-mail system for personal purposes unrelated to work, the employer could not lawfully prevent employees from using e-mail for union-related purposes. Recognizing that prior NLRB precedent supported this challenge to the employer’s implementation of its e-mail policy, the NLRB departed from and modified its prior precedent in the discriminatory application area and held that an employer does not discriminate against union-related use of its property merely because it permits some personal use of that property by employees. The NLRB held that an employer is allowed to choose what categories of communications to allow and prohibit so long as the distinction is not drawn along Section 7 lines.
This revised discrimination standard is beneficial to employers. It means that an employer does not need to permit union solicitation or distribution even if it permits solicitation or distribution for personal purposes, so long as the distinction made by the employer is not simply to prohibit union activity. Significantly, this portion of the Guard Publishing decision applies to all types of company property, and not just e-mail systems. In applying its new test to the case before it, the NLRB held that the employer could legally prohibit its employees from using its e-mail system to solicit support for the union and did not violate the NLRA when it disciplined the employee for sending e-mails urging support for the union during contract negotiations because, although the employer permitted employee e-mails of a personal nature, there was no evidence that it permitted e-mails intended to solicit support for a group or organization (with the sole permitted exception of the United Way).
Under Guard Publishing, you should be able to discipline your employees for their violations of your Communications Policy, so long as you have (and will continue to) strictly and consistently enforce the Policy. In other words, the two employees at issue can be disciplined for their union solicitation efforts only if employees who have solicited (or will solicit) participation in other membership organizations were also (or also will be) disciplined. If your Policy is not enforced as to non-union-related e-mail, but is enforced to ban union-related e-mail of a similar type, your enforcement of the Policy will give rise to a discrimination charge that will have a high chance of success. It would not be surprising if your union tests your enforcement of the Policy by encouraging its members to send prohibited, non-work-related e-mails that do not pertain to union issues to see if you will enforce the Policy in those situations. Monitoring e-mail is a tough task, but proper, consistent monitoring and enforcement is essential to prevent and defend against discriminatory enforcement unfair labor charges.
A few words of caution, however, in closing. Guard Publishing was one of several significant 2007 NLRB decisions decided by 3-2 votes, along party lines. The ultimate fate of the Guard Publishing decision is far from certain, and a number of factors, alone or together, could make it relatively short-lived. The majority’s decision, which has already been appealed to the Court of Appeals for the District of Columbia, provoked a vigorous dissent and may be modified or reversed by the Court of Appeals. There is also talk that union interests may seek to have legislation introduced in Congress that would have the effect of overturning the decision. Moreover, close party line decisions like Guard Publishing are vulnerable to change because, by long-standing tradition, the composition of the NLRB splits in favor of the party occupying the White House. The result of this November’s presidential election may affect the NLRB’s ideological balance and might result in the modification or reversal of the holdings in Guard Publishing. It is also likely that further litigation testing the exact parameters of Guard Publishing will occur.
Non-Fraternization Policies, Quirky Question # 30
Quirky Question # 30:
We are a large, national, medical device company. Over the years, we’ve adopted personnel policies to provide appropriate guidance to our workforce and to comply with federal and state laws. We have a well defined and clear sexual harassment policy. Notwithstanding our sexual harassment policy, we find that we periodically confront workplace problems associated with relationships among co-workers that fall apart. (We’ve had this happen with married couples going through a divorce, as well as couples who were just dating.) These situations are exasperating. Consequently, our company is considering adopting a broad “Non-Fraternization” policy, prohibiting relationships between employees. Is this a good idea or will we be plagued with enforcement problems?
Roy’s Analysis:
As a preliminary observation, it is important to recognize that non-fraternization policies are legitimate and enforceable. Many companies use them because they advance significant corporate interests.
A) The policies minimize favoritism, especially in the context where one employee may have supervisory responsibilities over another person with whom he/she is involved.
B) Non-fraternization policies minimize the perception of favoritism. Even if a member of a relationship is attempting scrupulously to be fair and objective, other employees may perceive favoritism toward the individual with whom he/she is involved.
C) The policies reduce the likelihood that the company will confront sexual harassment litigation if the relationship between two emotionally involved employees ends, especially when both members of the couple are not equally enthused about the termination of the relationship.
D) Non-fraternization policies enhance the company’s flexibility with respect to employment decisions that may result in the transfer of the employees; it is much harder to find suitable employment opportunities for two members of a couple, than just one person.
E) Non-fraternization policies reduce the likelihood that there will be undesired consequences for the company if adverse actions are taken toward an employee involved with a co-worker. Negative job actions are difficult enough without the added complication of evaluating how the other employee member of the couple will react to a layoff or demotion of a spouse or significant other.
For these and other reasons, many companies ban the hiring of spouses or significant others. Some companies do not adopt an absolute ban but do preclude individuals who are married or otherwise involved from working in the same department or exercising supervisory responsibility over each other.
Unfortunately, too often companies adopt non-fraternization policies without giving adequate consideration to how they are going to address a situation where two employees already are involved. Or, they fail to consider how they will address situations where two employees become involved after the policy is established. As I’ve expressed in other Blog analysis, I recommend that companies thoughtfully consider these (and other) issues before the situations arise and the assessments become influenced by the specific individuals involved.
As you referenced in your question, there are difficult “enforcement” issues that your company likely will confront. Some of them may be definitional. For example, although a policy may be easily applied to a married couple, what about two employees who are just dating? Is one date enough? Two? How many? At what point will the company insist on policy enforcement? Moreover, how will your company collect the relevant data and/or monitor the situation?
Not only are there difficult practical issues to consider, implementation of such a policy also raises difficult legal issues. Absent a carefully evaluated and consistently enforced approach, there is a risk of both disparate treatment and disparate impact claims. Disparate treatment claims could arise if your company concluded that to enforce its policy, the female employee must leave your organization. Disparate impact claims could arise even if your company had a facially neutral basis for selecting which member of the couple would be terminated, but your approach had an adverse impact on members of a protected class. For example, the policy may be that the employee with less seniority must leave the company. But, if your company’s past hiring practices have resulted in a workforce where your male employees generally have greater seniority, a women forced out by this policy arguably may have a disparate impact claim. Similar analysis may apply if the decision is made on the basis of management/non-management, salary, or other criteria that would favor men in light of your historical hiring practices. Even determinations based solely on performance evaluations may be problematic, since the two members of the couple may not be evaluated by the same person and there may be little consistency or fairness with the ratings.
Some companies request the employees to decide who will remain and who must leave the company. Although this approach eliminates any potential claim that the company’s selection criteria were unfair or biased, requiring the employees to choose may not yield the result the company most desires. For example, the most talented member of the couple (and the person the company would most like to retain) may have more opportunities elsewhere. Given that fact, the couple may elect to have that person leave. Although this eliminates risks associated with the selection process, it also may eliminate a talented employee from your workforce. Another option is the highly scientific coin flip. This approach certainly is a neutral process, but again, it may result in the loss of the employee the company would most like to retain.
Perhaps the best approach is to prepare, in advance of any necessary decision, a matrix reflecting the values the company would like to utilize in determining which employee should be retained. Commonly used in the context of reductions in force, the criteria on the matrix are more likely to ensure that the company will be left with the employee it most wishes to retain. The criteria would depend on the nature of the position and the skill sets deemed important by the company.
Finally, when making this determination, thought should be given to evaluating other potential legal risks to the company that may be associated with the discharge of one member of the couple. For example, are there contracts that limit in any way the company’s termination rights? Was one member of the couple recently recruited to the company to take the position, thereby increasing the possibility of a promissory estoppel claim? Does either member of the couple have a charge of discrimination or any other legal action pending against the company, increasing the risk that a discharge will result in a retaliation claim? If the company is desirous of managing carefully the risks associated with this difficult decision, these variables also should be factored into the company’s decision regarding which employee to retain and which employee to discharge.
The bottom line is that non-fraternization policies have a number of potential benefits.But, they raise practical and legal concerns that can be difficult to manage.They also can generate resentment among employees whose attitudes with respect to employer inquiries into this topic can be summarized by the observation, “None of your business.”Actually, it is your business, but you have to decide whether the benefits of adopting such a policy outweigh the detriments.
Quirky Question # 29, Maintaining Electronic Records
Quirky Question # 29:
Our company has offices in California. This year we want to improve our document retention practices. We’ve decided to maintain electronic records of personnel files. Can we do this in California? We were told that California law requires the records to be available at the job site. If this is true, can we switch to an electronic database in California?
[Readers: Today we post another one of our California-specific analyses. The analysis below was prepared by Mandana Massoumi and Gabrielle Wirth of our firm's Irvine, California office. Gabrielle is a 1982 graduate of the University of California, Davis, School of Law, and Mandana is a 1987 graduate of the University of San Francisco School of Law. Their resumes are available on our firm's website at www.dorsey.com.]
Mandana’s and Gabrielle’s Analysis:
The California Labor Code, § 1198.5, specifically addresses the subject of your question. Under the Labor Code, a California employer is permitted to retain personnel files electronically. That right, however, is circumscribed somewhat, to ensure that employees are permitted access to their personnel files.
In short, you can switch to an electronic database. But, you have to make sure the records can be downloaded, stored on a disk, and maintained at your California location. California Labor Code Section § 1198.5 requires employers to permit an employee to inspect his or her personnel records. Inspection pursuant to this section must be allowed at “reasonable intervals and reasonable times.” (L.C. § 1198.5(b).)
Section 1198.5( c) requires the employer do one of the following:
(1) Keep a copy of each employee’s personnel records at the place where the employee reports to work.
(2) Make the employee’s personnel records, available at the place where the employee reports to work within a reasonable period of time following an employee’s request.
(3) Permit the employee to inspect the personnel records at the location where the employer stores the personnel records, with no loss of compensation to the employee.
L.C. § 1198.5(c) (emphasis added). Therefore, § 1198.5 permits the employer to keep the original personnel records at a location other than that were the employee reports to work, so long as a copy is available at the location where the employee works and can be made available for inspection upon request.
Subject to the provision in section (2) above, the employer is not required to make personnel records available immediately upon request. The California Department of Labor Relations, Division of Labor Standards Enforcement (“DLSE”) offered some guidance in its August 27, 1998 opinion letter on how soon such personnel records should be provided to an employee for inspection. (See Wage-Hour Opinion Letter No. 1998.08.27 (1998).)That letter reiterated the employers’ obligation to make records available to an employee within a “reasonable” time. The August 27, 1998 opinion explained that while reasonable attempts at a timely response must be made, there was no per se rule and would be subject to a “case by case” evaluation. The DLSE stated as follows:
“The Division has historically taken the position that the flexibility demanded by the clear language of this statute means that reasonableness can only be determined on a case by case basis. …
Other difficulties in setting any hard and fast rule on access to an employee’s personnel file would allow, for example, an out of state employee who maintains their personnel files in an out of state location, or one who has statewide operation and employee, but maintain their personnel files at a central location, to provide access to these files within a “reasonable period of time” after a request is made to inspect them by the employee. On the other hand, it would not be unreasonable to expect fairly immediate access to an employee’s personnel file maintained at the place where the employee works as required by statute, absent compelling reasons or unusual circumstances that the employer would have the burden of establishing.
In the event your constituent is denied access to their personnel files outside of these time parameters, or altogether, he or she may file a complaint with the nearest office of the Division of Labor Standards Enforcement.” (Emphasis added.)
In sum, the regulations permit employers to keep electronic copies of the personnel files. However, employers must ensure a copy (electronic or hard copy) is maintained and retrievable (to be printed in hard copy format upon request), at the location where the employee works in California.
A separate issue is what materials you wish to include in the electronic personnel records. When maintaining electronic copies of personnel files, we recommend that you consider segregating certain types of materials to ensure that they are not inadvertently produced when the personnel file materials are made available to the employee. For example, business records, confidential data, and privileged communications should be scrutinized carefully to assess whether any of this data belongs in the personnel file. Consideration also should be given to the retention periods that govern different types of documents. While certain types of documents have mandated retention periods, other materials (e.g., emails and other routine communications) do not and may be destroyed after a reasonable period of time. One potential problem with maintaining materials electronically is that you may find yourself retaining documents that could be (and should be) disposed of. Therefore, if you elect to maintain electronic personnel files, you may want to conduct periodic file reviews to cull information that no longer needs to be retained.
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